Women are Hard Hit Victims of the Mortgage Crisis

By: Ellen Frick, Outreach Coordinator, NHS of Baltimore

Everyone is hurting in this economy but some groups of people are affected more than others. One of these groups is women. Women have made tremendous financial and investment gains over the last few decades. For instance, single women now make up a greater percentage of homebuyers than single men. Despite these gains, women are also some of the most vulnerable when it comes to economic stability. Here at NHS of Baltimore, 77 percent are women. and of those 77 percent, the majority are single heads of household, homeowners.

Issues such as these were recently discussed at the Maryland Commission for Women's (MCW) 2009 Empowering Women in this Economy Symposium. The event, held earlier this month at Prince George’s Community College, included speakers such as U.S. Representative Donna Edwards and Maryland Commissioner of Financial Regulation, Sarah Bloom Raskin.

It is important to discuss womens' role in this economy because discrimination, both explicit and covert, places females at a disadvantage. Today women still earn far less money than men for the same types of work. Concerning the mortgage crisis, the National Council for Research on Women (NCRW) found that women are 32 percent more likely to receive sub-prime mortgages despite having slightly higher credit scores overall than men.

The national study, Battered by the Storm: How the Safety Net Is Failing Americans and How to Fix It, reveals even more shocking statistics. The study notes that while mothers have increased their presence in the workforce, similar gains have not been made in access to affordable child care. This is one reason why mothers, especially single mothers, are continually vulnerable when economic conditions are poor.

Another statistic from the research explains that 37 percent of families headed by single mothers were considered poor in 2008; it is estimated that the 2009 figures could be closer to 45 percent. Furthermore, the study found that African American and Latina women are among the groups most negatively impacted in economic crisis. More than encountering discrimination with loans, there are many ripple effects that women must face when it comes to economic stability. Furthermore, women are most often the primary care providers of children, and therefore healthcare and child care factors must be taken into account.

We cannot let the economic gains made by women in the last few decades dissipate because of the financial crisis. The National Council for Research on Women suggests writing to your representative about womens' issues or simply starting a discussion with friends and neighbors. In thinking about ways to combat and alleviate issues due to the economic crisis, we need to have solutions that are catered towards the interests and needs of women.

To learn more about gender disparity and discrimination in home mortgage lending click here.

Renters Risk Losing Homes in Foreclosure Too

By: Ellen Frick, Outreach Coordinator, NHS of Baltimore

At NHS of Baltimore, foreclosure prevention counselors have helped many individuals negotiate loan modifications with their lenders in order to mitigate the loss of a home. However, when it comes to foreclosure prevention, our services aid mainly homeowners, not renters. Yet according to the National Low Income Housing Coalition, an estimated forty percent of people losing their homes due to foreclosure are renters. In some cases, tenants may not even be aware of the risk until they are served an eviction notice.

I recently attended a Maryland Renters and Foreclosure Conference at the Federal Reserve Bank of Richmond in Baltimore. The event was also sponsored by the Public Justice Center, the Baltimore Homeownership Preservation Coalition (BHPC), and the Rental Housing Coalition. The conference emphasized that tenants have long been ignored in the mortgage crisis and only recently have their rights been protected through law.

Fortunately, just this past spring, new federal legislation was enacted to protect renters whose landlords are facing foreclosure. This federal law, Protecting Tenants at Foreclosure Act, aims to ensure renters are aware of a possible foreclosure and, if necessary, are given an eviction notice in a timely manner. One of the stipulations of the law states that if the tenant has more than ninety days left on their lease, they may have a right to stay in the property until the lease is expired. Keep in mind that many laws concerning renters’ rights still vary state-to-state and the new federal legislation does not supersede state laws.

If you are a renter in need of assistance call Baltimore Neighborhoods, Inc.’s (BNI) Tenant-Landlord Hotline at 410-243-6007 or the Maryland Department of Housing and Community Development’s (DHCD) information line at 877-775-0357. Another great resource is the Renters’ Rights brochure published by the Baltimore Homeownership Preservation Coalition and the Rental Housing Coalition.

Keeping Your Credit Score Healthy During the Holidays

By: Salina Greene, Outreach Coordinator, NHS of Baltimore

As we come closer to the end of the holiday season, it is possible to get caught up in various credit traps associated with purchasing gifts and essentials for your family. What many people don’t realize, is just how hard it is to get out from under heaps of credit card debt and what that debt can do to your credit. Bad credit can come back to haunt you in a number of ways.

For instance, if you’re interested in purchasing a new home, one of the biggest factors a lender will consider is your credit score. No one wants a huge shock when they go to apply for a mortgage, only to find out their credit is not up to par. The most common credit mistake consumers make during the holidays is opening a new line of credit with a retail store. This accounts for 10% percent of your credit score. These offers are usually associated with the promise of a large percentage off your purchase. Unfortunately, this pitfall is one of the best marketing tools retailers use to boost revenue. Hence, the more you spend on your current and new cards, the more it can have a very negative impact on your credit rating.

With big gift-purchase balances on your cards, it can be difficult to make on-time payments. Most people do not realize, even a single late payment of 30 days can significantly affect your score. Payment history accounts for approximately 35% percent of your overall score. For instance, a credit score of 780 can be brought down 90-110 points. A score of 680 can go down 60-80 points.

Getting stuck with a 10% interest rate can be devastating within itself. Lenders are becoming more strict as to who they approve because of the rise in foreclosure. An interesting fact to take into consideration is the new FICO score needed to qualify for a home purchase. Two years ago, a 620 credit score was good enough to get you the best rate on a 30-year fixed mortgage. Nowadays, a 700 score range is necessary for the same mortgage rate; a huge jump over the course of two years. If you do not know your credit score, feel free to access, www.AnnualCreditReport.com for your free copy. Under federal law, everyone is entitled to a free copy of their credit report once a year from each of the three national credit-reporting agencies. It’s never too late to establish a good line of credit.

Federal Government Still Trying to Work Out Kinks in Home Affordable Mortgage Program

By: Ellen Frick, Outreach Coordinator, NHS of Baltimore

In response to the widespread mortgage crisis, the Obama administration established the Home Affordable Modification Program (HAMP) at the beginning of 2009. The program was created to help homeowners avoid going into foreclosure. If borrowers are eligible, lenders will work to negotiate the terms of the loan. For instance, the monthly payments may be decreased and the repayment period extended. So far, the program has surpassed its goal of aiding 500,000 homeowners who were at risk of losing their homes to foreclosure.

Once a loan modification is designed through HAMP, a homeowner must successfully pass through a trial period of the new terms before the modification can become permanent, which has sparked some criticism, as it is estimated that only around half of these modifications will become permanent. In a recent article, the New York Times investigates why so many loan modifications fail to become permanent. The article points out the possibility that a “permanent” modification may only last for five years.

Earlier this week, the government announced they were going to make changes to HAMP in light of the aforementioned criticisms. Examples of the HAMP revamp include extending the trial period, looking more closely at paperwork, and possibly even monetary sanctions for lenders who are not doing all they can towards granting the modification. Still, a foreclosuretruth.com blogger doubts these changes will improve the program. He wonders if the HAMP program will just dig a deeper hole, leading more homeowners into exotic mortgages beyond their means.

Despite the criticisms of HAMP, the program has made some important strides to ensure that homeowners who want to save their homes are given a good faith chance to do so. According to Rena Somar, Homeownership Advisor, NHS of Baltimore, HAMP has helped many of her clients get loan modifications when the lender may have otherwise cast a blind eye. However she says, “it is still too early to judge the overall success rate of the modifications because all of my clients who have received help from HAMP are still in the trail period”.

For more specifics on HAMP, including information on whether you are eligible to participate, click here.

Holiday Green Tips

By: Salina Greene, Outreach Coordinator, NHS of Baltimore

Gov. Martin O’Malley wants everyone to join together during this holiday season by embracing a greener lifestyle. This is part of a state-wide effort to create healthier environments for the citizens of Maryland. Although it will take time and a concerted effort by all, here are a few tips the Governor and the State Department of Natural Resources(DNR)decided to share with the Baltimore community:

1. Trying to save money on your electric bill? The use of energy lights and timers, which use 90% less energy than conventional lights, can save you up to $50 a month on your energy bill.

2. Buying local. This not only supports your local farmers and businesses, it supports the environment by decreasing the amount of carbon and shipping emissions. Click here to view specials offered in Main Street communities in Maryland.

3. Wise travel. Taking public transportation or carpooling saves on transportation emissions. Sitting in traffic decreases your fuel efficiency by as much as 33 percent. Try to avoid congestion if at all possible. Try leaving for your destination at off-peak times. For example, after 8 p.m. or early morning hours before 6 a.m. Pack as light as possible. This will also save you on luggage fees.

4. Reduce your holiday waste. This time of year averages a 25% increase in waste products.The use of less and/or recycled packaging such as reusable fabric and old newspapers saves on waste.

5. Recycle your Christmas tree. Don't put it into the landfill. Most local governments have tree recycling programs. Click here to learn about recycling services available in Baltimore. Lastly, when you cut a tree, please plant a tree.

These are just a few helpful tips to help consumers on their way to becoming a greener, cleaner community.

Banks Tighten Fists on Personal Lending: loans still hard to get

By: Ellen Frick, Outreach Coordinator, NHS of Baltimore

The current economic climate has everyone wary of financial loans. Risky lending practices that enhanced the mortgage crisis have hurt lenders, borrowers, and the economy as a whole. Consequently, many lenders are changing their loan policies, especially concerning unsecured personal loans to individuals with a poor credit rating. An unsecured, or signature loan as it is also known, is one that is not backed by collateral. Often this means higher interest rates as well.

One financial institution that has changed their lending policies in the wake of today’s economy is Bank of America. As of October 31, 2009 Bank of America is no longer offering personal loans. Other large banks such as Wells Fargo and CitiBank continue to offer personal loans, however Subprime Blogger anticipates that other banks may follow in the footsteps of Bank of America. Other places to look for loans are smaller regional banks and credit unions.

As Bank of America has shown, many lenders are less willing to lend money to individuals with bad credit. Minimum credit score limits to get a loan have been on the rise and a lower credit score will likely mean higher interest rates on any loan. Thus it is increasingly important to keep your credit and other financials in shape. One way to improve your credit is to make small purchases using a credit card and pay them back right away.

Research other ways to raise your credit score and consider consolidating your debt to lower interest rates. NHS of Baltimore offers financial fitness classes free of charge, which discuss the importance of building your financial stability and offer advice on how to do so. And as always, NHS of Baltimore's counselors are available to answer any of your questions.

BGE Customers to Receive $100 Credit in February

By: Salina Greene, Outreach Coordinator, NHS of Baltimore

Chilling winds, freezing rain, single digit temperatures- we are all familiar with they place on our heating bills during the winter months. Families struggle every year to find a way to lower their consistently higher utility costs, which most commonly peak in the month of February. Baltimore Gas and Electric (BGE) has decided to deliver a post-holiday gift to their customers- a $100 credit on their February bills!

You may ask, too good to be true? It turns out this credit is part of several conditions imposed by the State of Maryland and energy regulators. BGE’s parent company, Constellation Energy Group has recently been approved for a joint merger with Electricite de France (EDF), which closed its doors last month. After a status hearing earlier this week with the Maryland Public Service Commission, BGE mapped out all of their precautionary measures to protect their business in case the parent company runs into financial troubles. All residential customers as well as customers who have switched to another supplier are eligible for the credit. This credit is in response to increasingly higher bills paid by so many Marylanders.

Under the new long-term contracts, customers should be seeing a decrease in their bills in the coming months; as natural gas and electricity prices are dropping globally. BGE gas bills are expected to decrease by as much as 25% this winter. Electric bills should drop by as much as 15% by 2012 and the decline is expected to continue. Constellation’s merger with EDF will create a pool of $36 million for Constellation’s foundation, to help pay for the creation of a visitor’s center, and the EDF’s relocation to Maryland. The long-term fate of the various new projects from this merger is dependent upon the federal loan guarantee from the U.S. Department of Energy (DOE). This will be decided next year.